Dive Brief:
- Addressable advertising, or targeting TV ads at the specific households the ad is delivered to, presents opportunities for food and beverage marketers.
- The trick for marketers is to find the right margin of targeting intensity. "When you target more tightly, it increases return, but targeting too tightly decreases return," Fernando Arriola, VP of marketing at ConAgra, told Ad Age. ConAgra has been running addressable advertisements for almost three years.
- Marketers could use addressable advertising to push products that perform better in certain regions or have a lower household penetration, as has been ConAgra's strategy.
Dive Insight:
Addressable advertising could force food and beverage marketers to reconsider their targeting strategies overall, which may make the marketing department and its efforts more efficient.
Finding that sweet spot for targeting consumers — narrow, but not too exclusive — can have a ripple effect well beyond TV advertising. It could also impact social media and other digital marketing efforts, if not the branding itself. As marketers think more strategically about target audiences, they may uncover new product positioning tactics or marketing messages that could resonate.
As consumers' interests and the ways to reach consumers become more segmented, one campaign isn't always enough (unless a company can tap into something as ubiquitous and personalizable as emojis, as PepsiCo recently did). The days of the lone target customer profile may be over as the method becomes too outdated for a digitally connected world.
Manufacturers will face certain challenges if they decide to pursue addressable advertising. Implementation is difficult because currently, no standardization for the addressable technology exists among different TV operators. Manufacturers also need to determine if this method is worthwhile for that particular product or brand in terms of having enough addressable-enabled households available.
Developing additional creative for more than one addressable household type also means heftier marketing investments at a time when many companies are cutting costs, including marketing budgets.